Correlation Between Scan D and BenQ Medical
Can any of the company-specific risk be diversified away by investing in both Scan D and BenQ Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Scan D and BenQ Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scan D and BenQ Medical Technology, you can compare the effects of market volatilities on Scan D and BenQ Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Scan D with a short position of BenQ Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scan D and BenQ Medical.
Diversification Opportunities for Scan D and BenQ Medical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scan and BenQ is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Scan D and BenQ Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenQ Medical Technology and Scan D is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Scan D are associated (or correlated) with BenQ Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenQ Medical Technology has no effect on the direction of Scan D i.e., Scan D and BenQ Medical go up and down completely randomly.
Pair Corralation between Scan D and BenQ Medical
Assuming the 90 days trading horizon Scan D is expected to generate 1.31 times more return on investment than BenQ Medical. However, Scan D is 1.31 times more volatile than BenQ Medical Technology. It trades about 0.04 of its potential returns per unit of risk. BenQ Medical Technology is currently generating about -0.01 per unit of risk. If you would invest 3,295 in Scan D on December 15, 2024 and sell it today you would earn a total of 35.00 from holding Scan D or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scan D vs. BenQ Medical Technology
Performance |
| Timeline |
| Scan D |
| BenQ Medical Technology |
Scan D and BenQ Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scan D and BenQ Medical
The main advantage of trading using opposite Scan D and BenQ Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scan D position performs unexpectedly, BenQ Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BenQ Medical will offset losses from the drop in BenQ Medical's long position.| Scan D vs. Feature Integration Technology | ||
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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